Eurotunnel shareholders have been warned that their investments will be worthless if they reject the proposed deal to restructure the companyâs debt at the end of this month.

In a letter to shareholders, Eurotunnel chairman and chief executive Jacques Gounon, said failure to reach an agreement would mean liquidation by the Paris Commercial Court, nullifying shareholders’ assets.

Gounon said: “The asset value at liquidation has been estimated to be approximately £890m (€1.3bn), almost five times less than that put forward in the plan. Shareholders would receive nothing. The same situation would pertain if the company was sold.”

He claimed that shareholders had no hope of a better deal: “It is also my duty to warn shareholders against those who would encourage them to refuse to accept and to engage in a game of bidding brinkmanship. Make believe, miracle solutions do not exist. Believing they do works against the interests of all shareholders.”

Eurotunnel, which is struggling to restructure its £6.2bn debt burden, has proposed a plan to create a new company called Groupe Eurotunnel.

The new company will launch a tender offer for Eurotunnel’s shares, and issue shareholders with at least 13% of the new company’s equity. It will also slash its debt by more than half, signing a new £2.8bn loan with a bank consortium and issuing £1.3bn of hybrid debt.

Eurotunnel this summer became the first large company to benefit from new French bankruptcy laws after eleventh-hour talks with some of its subordinated creditors failed to break the impasse.
The creditors were led by Deutsche Bank and a group called Arco. Eurotunnel chairman and chief executive Jacques Gounon in July branded the German bank "unreasonable" over its stance in the restructuring talks.